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Gold Bullion Shows Its “Metal” as Solid Performer With Stocks

Posted ByIsaac Nuriani|September 19, 2017

When I checked gold bullion prices last week, gold bullion prices have posted a near 15-percent year-to-date return, while the Dow Jones Industrial Average has climbed nearly 12 percent, and the S&P 500 is up 11.5 percent.

In what has turned out to be a most unusual year so far, gold and equities have done well together.

How unusual is this? According to a recent Wall Street Journal article titled “Anxiety Creeping In? It’s Rare for Gold and Stocks to All Be Up This Much,” there have been only four other years -- in the last 40 -- that gold has bested the Dow and S&P when all three have gained at least nine percent: 1986, 2006, 2009 and 2010.

Buying Gold Bullion -– A Smart Move Even In Good Times

Is it becoming more common for gold to do better than the stock market?

We’d have to answer “Yes” to that question. Look again at the years noted by the Journal. Three of the four instances of gold besting stocks…2006, 2009 and 2010…all occurred within the last decade (roughly). And then there’s 2017.

So is gold really a place to be when the sun is shining, as well as an asset to rely on when it’s raining cats and dogs?

We know gold is a good place to be when the stock market is sick. Are we now finding gold bullion is also a great asset to own when the market feels peachy?

That’s a more complex question to answer. But, if so, it speaks to the growing complexity of the investment landscape, and the idea that gold is likely to find greater favor with investors in the years to come.

The “Trump Trade”: Coming to an End, While Gold Remains Strong

Stock market investors were positively giddy when Donald Trump was elected. Now, they’re not as happy. Unfortunately, the effort to repeal and replace Obamacare failed, and there’s concern the administration may not be able to enact meaningful tax reform. Trump wants the corporate tax rate reduced to 15 percent (from 35 percent), and the possibility of such a big cut is one reason the market has been dancing on air.

Investors love it when the companies they invest in pay a lot less in taxes. But will that happen now? Maybe not.

Bottom line: There’s a growing perception Trump will be unable to bring about the meaningful changes the stock market has been betting on for months, so many folks are now hedging their bets with precious metals, like gold bullion coins, even as the stock market continues to rise on the energy that remains.

More broadly, the “set it and forget it” days of investing are long gone. To effectively navigate this increasingly-complex environment, you’d probably like some help. That’s where Augusta Precious Metals comes in. Augusta’s team of highly-trained and experienced gold and silver professionals are ready to assist in stocking your portfolio with the right allocation of precious metals. If you could have a gold and silver asset specialist assist you for free, would you do it? Of course! Augusta’s consultations are entirely complimentary. Give us a call, toll-free, at 855-242-4121, and let us help you. Because building and protecting your wealth is only going to get more challenging from here.

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Augusta does not provide legal, tax, or investment advice. The Augusta® Depository Gold IRA is a self-directed IRA containing physical precious metals administered by a third-party custodian and stored in a non-government depository storage facility where investors can make an appointment to see their precious metals. The Augusta® Home Delivery Gold IRA is a self-directed physical precious metals IRA delivered to your home. Some investors choose to store IRS-approved American Eagle gold or silver in an IRA in their homes. However, it is wiser to store all metals in a safe deposit box at a U.S. bank. If investors sidestep rules or mishandle account assets (e.g., setting up the IRA improperly, engaging in a prohibited transaction, such as withdrawing metals before retirement to use for any other purpose, etc.), or if it is determined that home delivery or home or bank safe deposit box storage are not permitted by the IRS, the investor could lose tax-exempt status and have to pay taxes and penalties. There is no clear IRS guidance on the legality of the home delivery IRA structure or home or safe deposit box storage, and the IRS is under no obligation to issue guidance on whether home or bank safe deposit storage satisfies IRS requirements and may, at any time, audit an IRA, declare that home or bank safe deposit box storage does not satisfy IRS requirements, and impose taxes and penalties on the IRA owner. It is important to consult your own legal and financial advisors before opening a home delivery IRA from Augusta, and then work with your advisors to decide where to store your precious metals. As with any investment, past performance might not predict future returns. The price of precious metals fluctuates over time and investors might lose money.

Michael Dallo, CPA, JD, LL.M. is a tax attorney and certified public accountant (CPA) of Dallo Law Group, a Professional Corporation. For over 10 years, Michael has zealously represented hundreds of clients in resolving tax disputes with the Internal Revenue Service and California taxing agencies, as well as developing sound tax positions and arguments to minimize their federal and state tax liability.